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Major banks reveal new loans under SME Recovery Loan Scheme

Adrian Flores
Adrian Flores
01 April 2021 1 minute readShare
SME Recovery Loan Scheme

Two of the big four banks have announced new low interest rate business loans as part of the federal government’s SME Recovery Loan Scheme.

Last month, the federal government expanded and extended its SME Loan Guarantee Scheme and renamed it the SME Recovery Loan Scheme.

Under the scheme, the size of eligible loans has been increased from $1 million under the current scheme to $5 million.

The scheme was also recently extended to businesses impacted by the recent east coast floods.

Commonwealth Bank

From 1 April, eligible businesses can now apply to CBA for loans up to $5 million with variable interest rates from as low as 2.6 per cent p.a. for secured loans, and from 2.85 per cent p.a. for secured loans with a repayment holiday from 12 months.

Unsecured loans are available with rates from 3.25 per cent p.a., and from 3.75 per cent p.a. with a repayment holiday from 12 months.

CBA said the new rates are as much as 75 basis points lower than loans offered by the bank through the federal government’s Coronavirus SME Loan Guarantee Scheme implemented in 2020.

CBA’s group executive of business banking, Mike Vacy-Lyle, said the bank is committed to continuing to play a leadership role in Australia’s economic recovery.

“This scheme means businesses have the support they need to get back on their feet. As demonstrated in the previous rounds of government support, CBA plans to play a leading role in mobilising much-needed funding,” Mr Vacy-Lyle said.

“These lower-cost loans will help businesses to invest in assets like equipment and machinery, and will also support longer-term investments that underpin growth and jobs. Businesses will be able to use the scheme to refinance existing loans.”

Westpac

From 1 April, Westpac is offering eligible new and existing small business customers access to the following loans:

  • 2.58 per cent p.a. interest rate for three- or five-year fully secured variable loans
  • 3.48 per cent p.a. interest rate for 10-year fully secured variable loans

Westpac chief executive, consumer & business banking, Chris de Bruin said the targeted support is needed for sectors and geographies that are still facing ongoing challenges due to the effects of the pandemic.

“The new loans give small businesses access to low-rate finance, with the option of deferring repayments, to provide further breathing space for business owners,” Mr de Bruin said.

“From tourism operators in Queensland to hospitality business owners in South Australia, we have had strong interest from customers in accessing the SME Recovery Loan Scheme to help them get through the challenges ahead.”

Major banks reveal new loans under SME Recovery Loan Scheme
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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